Oil Poised For Biggest Decline In Six Months

Oil Poised For Biggest Decline In Six Months

"All is not well with the economic world, at least according to bond and commodity traders", Michael McCarthy, chief market strategist at futures brokerage CMC Markets in Australia, wrote in a note published on Friday.

Hence, we wish to activate WTI crude directional hedge, by adding shorts CME WTI futures for June delivery for arresting downside risks in short-run, simultaneously, go long in CME WTI futures of August'2019 month deliveries.

Washington will sanction any country which buys oil from Iran after the expiration of waivers on May 2, U.S. Special Representative for Iran Brian Hook said on Thursday.

If the trade group's data are confirmed Thursday by official US Energy Information Administration numbers, the price of US crude could hit the important "round number" $60 per barrel level after dropping Wednesday to its lowest since March 11.

Concerns over trade tensions between the United States and China have mounted after reports that China is considering restricting the export of rare earth elements. This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying, 'he said.

Bernstein Energy said under "a full-blown trade war scenario", global oil demand would grow by just 0.7 per cent this year, half of current estimates.

The API data were released as oil prices are benefiting from output cuts by the major producers and falling supplies from Iran.

Iranian May crude exports dropped to less than half of April levels, at roughly 400,000 barrels per day (Bpd) after the US tightened sanctions on Tehran's main source of income.

Trading in the front-month spread is closely tied to supply and demand at Cushing, the delivery point for US crude futures. "That market participants are prepared to pay such a premium for oil that can be delivered at short notice points to tight oil supply".

OPEC and other major oil producers, including Russian Federation, pledged in December to cut production by 1.2 million barrels per day in order to prop up prices, effective from this January.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. This article is strictly for informational purposes only. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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